Chapter 1 – Flashcards with Answers

The ___________ cost of an activity takes account not only of required money outlay but also the value of the time you spend on the activity.

The opportunity cost of your time can be roughly estimated using your _______.

POSITIVE or NEGATIVE economic analysis involves objective statements that can be disproven using data.

POSITIVE or NEGATIVE economic analysis may include subjective and ethical judgments and makes recommendations on the best decision to achieve a given end.

study of how agents choose to allocate scarce resources and the impact of those choices on society.

Microeconomics studies​ _________, while macroeconomics studies​ _________.

The three principles of economics include​ ____________, ______________, and ______________

OPTIMIZATION, EQUILIBRIUM, or EMPIRICISM describes a situation where people weigh costs and benefits when making a decision

OPTIMIZATION, EQUILIBRIUM, or EMPIRICISM describes a situation where no one would benefit from changing his or her behavior

OPTIMIZATION, EQUILIBRIUM, or EMPIRICISM describes a situation where economists use data to analyze what is happening in the world

During the process of optimization economists believe that people are considering​ the ___________ of a​ choice, given the ______________ available at the time

The goal of optimization for an individual is to maximize overall ____-_______

The opportunity cost of an activity is a measure of what is GIVEN UP or GAINED when you do that activity

For a market to be in​ equilibrium, three conditions must hold: The amount produced by sellers must be EQUAL or MORE to the amount purchased by buyers; The costs of making a product must be EQUAL or LESS than the final price at which the product sells; Buyers must place a value on the uses of the product that is LESS THAN or GREATER THAN the cost of buying the product.

______________ describes how one event can bring about change in another.